Gap Inc. (NYSE: GPS) shares were up almost 14% Thursday following the company’s plan to reduce its store footprint by approximately 350 locations and moving to an online business model.
Amid the pandemic, Gap is one of the many retailers that’s in-person sales have bombed.
“We’ve been overly reliant on low-productivity, high-rent stores,” Gap brand CEO Mark Breitbard said on an investor call. The retailer has been in a continuous debate with Simon Property Group regarding rent payments throughout the global crisis.
The retail giant, composed of chains such as Gap, Old Navy, Banana Republic and Athleta, revealed its plan at an investor conference. The plan highlights the closure of about 30% of Gap and Banana Republic stores within North America by 2023. The company expects to bring in 80% of its revenue through e-commerce by that time period.
Furthermore, Gap is considering the closure of all its UK stores, ultimately risking thousands of jobs. The retailer announced that locations in the United Kingdom, France, Ireland and Italy are possibly closing by 2021.
Mark Breitbard, head of Gap brand global, said: “As we conduct the review, we will look at transferring elements of the business to interested third parties as part of a proposed partnership model expansion.”
“Franchise partnerships are a strong and cost-effective way to amplify the brand.”
A company spokesperson said it was looking at “alternative ways to operate the European e-commerce business.”